Contract Clauses Explained in Plain English

Browse 200+ sample articles free, written in plain English for businesses and individuals. The full library is for members.

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Termination

Knowledge Transfer Obligation

📖 3 min read

This clause requires someone (usually a departing employee, contractor, or service provider) to share their knowledge and expertise with the other party—for example, by documenting procedures, explaining how systems work, or training replacements. It

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Termination

Termination Assistance

📖 3 min read

This clause requires the party whose contract is ending to help wind things down—for example, by training replacement staff, handing over files, or continuing to provide services for a transition period. It matters because abrupt endings are expensiv

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Liability

Product Liability Exclusion

📖 3 min read

This clause says the other party won't be responsible if their product causes injury or damage to you or someone else. In the UK and US, product liability is a strict legal duty—manufacturers and sellers can be held responsible even if they weren't n

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Liability

Strict Liability Cap

📖 3 min read

This clause puts a maximum limit on how much money you can recover, even if the other party is strictly liable (meaning they're responsible regardless of whether they were careful or not). Strict liability applies in situations like product defects o

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Liability

Willful Misconduct Exclusion

📖 3 min read

This clause says that if you deliberately do something wrong or reckless, the other party cannot claim damages from you. It's a high-risk clause because "willful misconduct" is vague—courts in both the UK and US struggle to define exactly what counts

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Liability

Gross Negligence Liability

📖 3 min read

This clause limits how much money you can claim if the other party is grossly negligent (meaning they were extremely careless, not just a little bit careless). For example, a warehouse might limit claims to £100,000 even if their gross negligence des

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Commercial

Acceptance Criteria

📖 3 min read

This clause lists the exact tests or conditions that must be met before you have to pay for or accept a deliverable. For example, a software contract might say "the system is accepted only when it passes all 47 automated tests and processes 1,000 tra

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Commercial

SLA Measurement Period

📖 3 min read

An SLA (Service Level Agreement) is a promise about how well a service will work—like "99.9% uptime" for a website. The measurement period is how often this gets checked: daily, monthly, or yearly. This matters because measuring monthly instead of da

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Commercial

Service Credit Mechanism

📖 3 min read

This clause says the supplier will give you money back (a "credit") if they fail to meet their promises—for example, if a cloud hosting company's servers are down more than 1% of the time, they owe you a refund. Service credits are a practical altern

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Commercial

Benchmarking Clause

📖 3 min read

This clause says that prices or performance will be compared against market rates or competitors' offerings to make sure they're fair. For example, a software company might agree that its annual fee won't be more than 10% higher than what three simil

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